There was an inflow of $1.196 billion into the foreign exchange market last week through the interventions of the Central Bank of Nigeria (CBN) and activities at the Nigeria Autonomous Foreign Exchange Market (NAFEX).
The investors and exporters (I&E) window saw an increase in inflow has it pumped $986 million into the economy from $840 million which it made in the preceding week.
Money market rate decreased marginally last week as the Overnight rate (OVN) and Open Buy Back rate (OBB) fell to 6.83 per cent and 6.00 per cent respectively. Consequently, the average money market rate decreased by 0.92 per cent to settle at 6.42 per cent due to increase in the system liquidity to close at N780 billion due to an inflow from Open Market Operation (OMO) Treasury bills maturities of N315 billion and CBN’s retail refund of N360 billion despite an outflow from Wholesale, Invisible & Small and Medium Enterprises Forex auction of $210 million, Retail Auction of N350 billion and CRR of N2.9 billion during the week.
The CBN official rate and the rate in the Investors and Exporters’ foreign exchange Window rose by 0.02 per cent and 0.08 per cent to close at N306.15/$ and N362.35/$ respectively last week. At the bureau de change (BDC) the naira remained constant at N359/$, N478/£ and N413.5/€. The rates in the parallel market is expected to remain constant as the apex bank continues to supply forex into the market coupled with its frequent Wholesale and Retail Secondary Market Intervention Sales (SMIS) programme.
The Bond market traded on a bearish note last week with sell offs in most of the tenors. Sell offs was more pronounced on the JAN 2026 bonds (+38bps). The 2027 and 2036 bonds were the most traded bonds during the week with N95.37 billion and N105.80 billion value traded respectively. Average yield rose by 30bps to close the week at 14.85 per cent.
Despite a buoyant system liquidity during the week, the treasury bills market traded on a bearish note following the result of the primary market auction.
Consequently, the average yield rose by 5bps to close the week at 12.20 per cent. Market activities was relatively active as value of transactions rose to N955.84 billion from N413.61 billion in the previous week. Also, the CBN declared a no sale OMO results during the week as most participants bided at a high rate.
Meanwhile, the 30 days moving average of Nigeria’s foreign exchange reserve depreciated by $216 million from $46.09 to $45.86 billion as at August 30, 2018
The external reserve which stood at $47.07 billion as at the beginning of last month has continued to decline week on week as it stood at $46.091 and $45.88 on Friday 24, and Thursday, August 30, 2018 according to data on the CBN website.